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July and August update. Aiming to provide monthly or bi-monthly updates on progress. But plan still to file quarterly production reports rather than half month or quarter month updates.
Plant has not been running 24/7 to keep costs down.
Q) Long lead items
Roll mills - 3 to 4 weeks lead in. Performance improvement plan next 2 to 3 months and focusing on priority issues.
Q) When do we expect to reach 80% of production and will this still cover costs.
Operational break even is 80 to 100 tonnes a month. Team doing well to keep costs tight. Break even expected during first half of 2021.
Questions!
Not fit for purpose plant. Negotiations are underway in relation to compensations from the contractor. MM has repeatedly said throughout the presentation that we were supplied with plant not fit for purpose.
MM: 1) Focus on higher grade higher recovery in core mining zones. Move to deeper benches. This has been giving better recoveries.
2) Invest to make jig and mill plant fit for purpose. New harder rolls and adjustments.
3) Boost feed volumes to spirals and improve recoveries.
4) improve operations and maintenance management to achieve continuous operation with good plant availability. New plant manager delivering improved results.
5) Invest in increased spares and maintenance systems to reduce downtime and increase production rates.
Scores out of 5 by MM
Mine - 3/5
Crusher - 4/5
Jig & Mills - 3/5
Spirals - 2/5
Tables - 4/5
FME 4/5
MM: Jig & Mill - headache and needs improvement. Rolls and mill worn out too quickly. Contractor issues. Still issues to fix, interim solution in place, need to order much harder rolls for the mills.
Spirals - coarse and extra coarse material reaching spirals has been an issue. They do have solutions, has been difficult and has constrained recovery in this part of the plant.
Shaking tables - working well, good recoveries, pics to be published soon. FME part working well too.
In summary - parts of LP working well, other parts caused issues - making process but some issues still to be resolved.
MM: Parts of the ore body, particularly in south, altered/oxidised which made that type ore going through the plant giving low recoveries. Much head scratching. Moving away from these areas into core areas, getting much better recovery. Much more geological and metallurgical work has been done and given more information.
MM: W concentrate reaching 70%! Customers expecting 60% - so on some instances concentrate is over performing.
Rate of production is the issue.
MM: Plant update. Mine - issues with recovery. Jig and Mill - issues with reliability. Spirals - issues with capacity, recovery and reliability.
Crusher, Tables, FME (purfication) all working well (capacity, grade, recovery, reliability, operability).
MM: Going over previous quarter results. Acknowledging major challenge with W recovery.
It's on now - i'll try provide rolling updates if you like.
So who is joining the call shortly?
Had the same email GIT.
I sent my email asking for webinar details along with my questions asking about responsibility/compensation for the poor performing kit and where we are with getting the long lead in items mentioned in the June. No details back yet.
Personally, I feel reassured by the RNS/comms. I'm glad we're not waiting for the next Q results until we heard more. The investor webinar is appreciated and I think collectively rockets can be positioned ready to be inserted!
Q) If the plant was not operating as it should, and this was down to improper plant/commissioning vs what was promised, where do we stand with compensation from those at fault?
I know. Just wish I'd put more in earlier. Ho hum. Mustn't be greedy. It's making up for some paper losses here!
I almost did the opposite and sold a chunk of WRES to stick in syme this morning. Put in a few spare quid from elsewhere though. Already trippled last weeks little dabble in there!
IIRC there is comment in recent RNSs that the grades being delivered to the plant are as expected. Therefore the JORC seems fine, but the plant not up to it for whatever reason. Hopefully, we're now someway on our way to it working as intended!
That was my thoughts too - June quarter = Q3. But who knows?!
Perhaps we're getting a hint at those improvements given the figures reported/hinted at/vaguely mentioned for the beginning of July.